Daily Chart Art – October 7, 2010

Aha! It seems like the bulls were able to hustle the pair to the top of the channel. Good job bulls, give yourselves a pat on the back because it looks like the bears are going to take over with stochastic hollering that EUR/JPY is already overbought. But will they really? I think I’d wait and see how this sexy candlestick turns out first before I choose which side I’ll root for. If you choose to place your bets on the bears, you better watch out for the 115.00 handle as the pair may find support there.

EURGBP: 4-hour

Speaking of sexy candlesticks, what do you think of that long-legged doji that just formed on the 4-hour chart of EUR/GBP? I think it’s sizzzlin’ especially if we also factor in the stochastic which is already at the overbought turf. Sticking some Fibs into it we see that the pair may take a step back to the 50% fib and chill at the minor support/resistance level first before it goes on another hustle. But if it gets a mighty tight bear hug, we may see EUR/GBP test support somewhere around 0.8635.

EURCHF: 4-hour

Check out the action on EURCHF’s 4-hour chart. There’s an ascending trend line connecting the pair’s lows and a parallel trend line joining the pair’s highs. Why, that’s a rising channel right there! It seems that much of the movement is concentrated at the lower half of the channel and, with the stochastic nearing the overbought area, sellers might step up their game soon. Strong selling pressure could push the pair below the channel, probably until that resistance turned support area near 1.3070. But if buyers refuse to let up, they could carry the pair back to the top of the channel.

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